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Gas prices could fall below $2 for many Americans

Here's some good news for drivers in the United States: Gasoline could fall below $2 a gallon for many Americans later this year.

Retail gas prices have been falling steadily for several weeks now. The national average currently stands at $2.72 a gallon for regular gas, according to AAA, down 17 cents from the 2019 high in early May and down 7 cents in just the past week.

Wholesale prices are falling even faster, suggesting that prices at the pump should continue to fall.

"Pretty much every portion of the country should see drops between now and the end of next week," said Tom Kloza, head of energy analysis for the Oil Price Information Service.

Most of the decline is because of falling oil prices, in part thanks to booming US oil production. That has made up for cuts in production by OPEC nations designed to support prices. Oil prices have also fallen in part because of weaker-than-expected demand for gasoline in international markets, particularly China, where slowing economic activity has cut into auto sales.

Gasoline prices have fallen fastest in parts of the country where $4 gas was the norm at the end of last month. In California, which still has the highest average price at $3.86 a gallon, prices have fallen by 23 cents. And wholesale prices in the West are falling even faster than elsewhere in the country as refineries there that had been shut come back online.

"[Gas prices] should continue to fall as we move through the summer," said Kloza. "There's a high probability we'll be paying less than $2.50 in the next few months."

The national average price will probably decline even more — perhaps to $2.25 a gallon according to Kloza — later in the year. Once the summer driving season ends, demand for gas falls, pushing down prices. So does a switch away from the more expensive blend of gasoline required in the summer months to control smog.

A national average of $2.25 a gallon would probably mean that nearly half the nation's gas stations will be selling regular gas for less than $2 a gallon, Kloza said.